Canada's Ontario Teachers Pension Plan (OTPP) is at risk due to a large investment in the cryptocurrency exchange FTX, which is currently having a major liquidity crunch.

According to a recent Globe and Mail report, OTPP investment was made in FTX a year ago when the company was valued at $25 billion. The pension fund purchased its first FTX stake in October 2022 as part of a $420 million funding round with 69 other investors.

Teachers' Pension Plan Threatened by Volatility

Although OTPP did not disclose how much it invested in the turbulent company, FTX was missing from the list of investments worth more than $200 million in the fund's annual report for 2021, according to spokesperson Dan Madge.

The funding came from its Teachers' Innovation Platform, a section of its portfolio dedicated to high-risk, high-growth investments. OTPP currently runs the pensions of 333,000 active and retired Ontario teachers and has over $242 billion in assets.

According to OTPP CEO Jo Taylor, FTX as an exchange carries the lowest risk in the entire crypto asset class, and the fund's investment has grown well despite market volatility.

However, due to liquidity concerns, FTX is on the verge of someone being fully obtained by competitor exchange Binance.

Not The First Time

The OTPP's investment problem is the second of its kind, as another major Canadian pension plan encountered a similar problem in August.

After Celsius Network declared bankruptcy in July, the Caisse de dépôt et placement du Québec (CDPQ) was compelled to write off its $150 million investment.

Celsius was valued at $3 billion by CDPQ during a $400 million investment round in late 2021. While announcing the write-off, CDPQ's CEO, Charles Emond, stated that the fund joined the crypto sector too soon, focusing on Celsius's potential rather than the actual state of affairs.

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Nov 11, 2022
Crypto News

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